<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO
ANNUAL REPORT ON FORM 10-K
COMMISSION FILE NUMBER: 1-9308
RHODES, INC.
(EXACT NAME OF REGISTRANT AS
SPECIFIED IN ITS CHARTER)
GEORGIA 58-0536190
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4370 PEACHTREE ROAD N.E.
ATLANTA, GEORGIA 30319
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (404) 264-4600
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED:
- ------------------- ------------------------------------------
Common Stock, without par value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
<PAGE> 2
REQUIRED INFORMATION
The following financial statements for the Rhodes, Inc. Employees' Savings Plan
are included herein:
1. Report of Independent Public Accountants.
2. Statements of Net Assets Available for Plan Benefits as of
December 31, 1994 and 1995.
3. Statements of Changes in Net Assets Available for Plan Benefits
for the Years Ended December 31, 1994 and 1995.
<PAGE> 3
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
23.1 Consent of Arthur Andersen LLP
<PAGE> 4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of
Rhodes, Inc. Employees' Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of RHODES, INC. EMPLOYEES' SAVINGS PLAN as of December 31, 1995 and
1994 and the related statements of changes in net assets available for plan
benefits for the years then ended. These financial statements and the
schedules referred to below are the responsibility of the administrative
committee. Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1995 and 1994 and the changes in its net assets available
for plan benefits for the years then ended in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes (Schedule I) and schedule of reportable
transactions (Schedule II) are presented for the purpose of additional analysis
and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for plan benefits and the statements of changes in net assets
available for plan benefits is presented for purposes of additional analysis
rather than to present the net assets available for plan benefits and changes
in net assets available for plan benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Arthur Andersen LLP
Atlanta, Georgia
June 26, 1996
<PAGE> 5
RHODES, INC. EMPLOYEES' SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 INVESTMENT FUNDS
-------------------------------------------------------
SHORT-TERM RHODES COMMON
INCOME STOCK STOCK TOTAL
---------- -------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Cash equivalents:
Certificate of deposit fund $2,885,100 $ 0 $ 0 $2,885,100
Other 85,080 4,069 189,728 278,877
Wachovia Guaranteed Insurance
Contracts Fund 1,365,162 0 0 1,365,162
Common stock 0 341,533 1,970,838 2,312,371
---------- -------- ---------- ----------
Total investments 4,335,342 345,602 2,160,566 6,841,510
---------- -------- ---------- ----------
Receivables:
Investment dividend and income
receivable 3,556 29 4,208 7,793
Employer contributions receivable 41,192 7,971 16,474 65,637
---------- -------- ---------- ----------
44,748 8,000 20,682 73,430
---------- -------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS $4,380,090 $353,602 $2,181,248 $6,914,940
========== ======== ========== ==========
<CAPTION>
1994 Investment Funds
-------------------------------------------------------
Short-Term Rhodes Common
Income Stock Stock Total
---------- -------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Cash equivalents:
Certificate of deposit fund $2,741,700 $ 0 $ 0 $2,741,700
Other 35,343 922 179,565 215,830
Wachovia Guaranteed Insurance
Contracts Fund 1,439,772 0 0 1,439,772
Common stock 0 240,025 1,356,269 1,596,294
---------- -------- ----------- ----------
Total investments 4,216,815 240,947 1,535,834 5,993,596
---------- -------- ----------- ----------
Receivables:
Investment dividend and income
receivable 186 19 4,934 5,139
Employer contributions receivable 86,843 21,731 25,138 133,712
---------- -------- ----------- ----------
87,029 21,750 30,072 138,851
---------- -------- ----------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS $4,303,844 $262,697 $1,565,906 $6,132,447
========== ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 6
RHODES, INC. EMPLOYEES' SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND
INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 INVESTMENT FUNDS
-----------------------------------------------------
SHORT-TERM RHODES COMMON
INCOME STOCK STOCK TOTAL
----------- -------- ---------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 173,540 $ 259 $ 9,072 $ 182,871
Dividends 88,239 0 43,262 131,501
CONTRIBUTIONS:
Employer, net of forfeitures 258,724 43,429 101,030 403,183
Employee 624,522 104,864 242,094 971,480
NET GAIN (LOSS) FROM INVESTMENTS 14 (74,065) 496,687 422,636
TRANSFERS BETWEEN FUNDS (47,435) 46,153 1,282 0
WITHDRAWALS BY PARTICIPANTS (1,021,358) (29,735) (278,085) (1,329,178)
----------- -------- ---------- -----------
NET INCREASE (DECREASE) IN PARTICIPANTS' EQUITY
DURING YEAR 76,246 90,905 615,342 782,493
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT BEGINNING
OF YEAR 4,303,844 262,697 1,565,906 6,132,447
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT END OF ----------- -------- ---------- -----------
YEAR $ 4,380,090 $353,602 $2,181,248 $ 6,914,940
=========== ======== ========== ===========
<CAPTION>
1994 Investment Funds
-----------------------------------------------------
Short-Term Rhodes Common
Income Stock Stock Total
----------- -------- ---------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 120,490 $ 380 $ 8,111 $ 128,981
Dividends 86,510 0 39,036 125,546
CONTRIBUTIONS:
Employer, net of forfeitures 246,818 19,754 92,168 358,740
Employee 630,083 46,287 249,682 926,052
NET GAIN (LOSS) FROM INVESTMENTS 134 (23,867) 9,126 (14,607)
TRANSFERS BETWEEN FUNDS (200,274) 223,602 (23,328) 0
WITHDRAWALS BY PARTICIPANTS (899,590) (3,459) (239,782) (1,142,831)
---------- -------- ---------- -----------
NET INCREASE (DECREASE) IN PARTICIPANTS' EQUITY
DURING YEAR (15,829) 262,697 135,013 381,881
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT BEGINNING
OF YEAR 4,319,673 0 1,430,893 5,750,566
NET ASSETS AVAILABLE FOR PLAN BENEFITS AT END OF ---------- -------- ---------- -----------
YEAR $4,303,844 $262,697 $1,565,906 $ 6,132,447
========== ======== ========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 7
-2-
Participants are 100% vested in their own contributions. Participants become
fully vested in the Company's matching contributions after a five-year
period. Forfeitures, as defined in the plan agreement, of the nonvested
portions of the Company's matching contributions at the participants'
termination dates shall serve to reduce future required company
contributions. In 1994, the Plan was amended to allow roll-over
distributions of plan benefit payments to eligible retirement plans.
Participants may make withdrawals from their own accounts and from the
Company's vested account at any time, in accordance with the provisions of
the Plan. Certain withdrawals result in a delay before participant and
company contributions may resume.
In the event of termination of the Plan, the total amount in each
participant's account shall be nonforfeitable and immediately due and payable
to each participant, in accordance with the provisions of the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual basis
of accounting. The preparation of financial statements in conformity with
generally accepted accounting principles requires the Plan's management to
make estimates and assumptions that affect the accompanying financial
statements and disclosures. Actual results could differ from those
estimates.
CONTRIBUTIONS
Contributions by participants are made through payroll deductions, and the
Company's supplemental contributions are made monthly. Forfeitures of the
nonvested portions of the Company's matching contributions at the
participants' termination serve to reduce future required company
contributions. During the years ended December 31, 1995 and 1994,
forfeitures totaled $46,206 and $70,356, respectively.
INVESTMENT VALUATION
Investments of the Plan are stated at current market value as determined by
the plan trustee as of the balance sheet dates. Securities in public markets
are valued at their quoted market prices. Investments in guaranteed
insurance contracts of the Wachovia Guaranteed Insurance Contracts ("GIC")
Fund are stated at cost which, as determined by the Trust Investment
Committee of the Wachovia GIC Fund, approximates fair market value.
Purchases and sales of securities are reflected on a trade-date basis. The
difference between cost and market value from one period to the next on
investments bought, sold, and held during the year is recognized as net gain
(loss) from investments in the accompanying statements of changes in net
assets available for plan benefits.
<PAGE> 8
-3-
As of December 31, 1995, investments (at fair market value) that represent 5%
or more of the Plan's net assets available for plan benefits are as follows:
Wachovia Certificate of Deposit Fund $2,885,100
Wachovia GIC Fund 1,365,162
ADMINISTRATIVE EXPENSES
All administrative expenses are paid by the Company.
3. TAX STATUS
The Plan obtained its latest determination letter on October 26, 1995 in
which the Internal Revenue Service stated that the Plan was in compliance
with the applicable requirements of the Internal Revenue Code. The
aforementioned determination letter approves and includes all amendments to
the Plan as of December 31, 1995. Accordingly, no provision for federal
income taxes has been made in the accompanying financial statements.
4. RELATED PARTIES
During 1994, the Plan began to invest in company stock purchased on the open
market. As of years ended December 31, 1995 and 1994, the Plan held 35,029
and 19,202 shares of company stock, respectively. The Plan also invests in
common and collective trusts of Wachovia.
5. SUBSEQUENT EVENTS
On April 29, 1996, Rhodes, Inc. retained the services of Salomon Brothers Inc
to advise the Company concerning strategic alternatives, including a possible
sale of the Company, with the objective of enhancing shareholder value. The
initial impact of this announcement increased the market value of Rhodes,
Inc. stock and, in turn, the Rhodes Stock Fund (held in connection with the
Plan). In the event that the Company is sold, the Rhodes Stock Fund will be
liquidated immediately and all funds will be disbursed in accordance with the
provisions of the Plan. However, the full impact of this occurrence, whether
or not the Company is sold, has yet to be determined.
6. RECONCILIATION TO FORM 5500
As of December 31, 1995 and 1994, the Plan had $34,170 and $126,770,
respectively, of pending distributions to participants who elected to
withdraw from the Plan. These amounts are recorded as a liability in the
Plan's Form 5500; however, these amounts are
<PAGE> 9
-4-
not recorded as a liability in the accompanying statements of net assets
available for plan benefits in accordance with generally accepted accounting
principles.
The following table reconciles net assets available for plan benefits per the
financial statements to the Form 5500 as filed by the Company for the years
ended December 31, 1995 and 1994:
<TABLE>
<CAPTION>
NET ASSETS AVAILABLE
1995 FOR PLAN BENEFITS
BENEFITS 1995 DECEMBER 31
PAYABLE TO BENEFITS ---------------------
PARTICIPANTS PAID 1995 1994
------------ -------- -------- ----------
<S> <C> <C> <C> <C>
Per financial statements $ 0 $1,329,178 $6,914,940 $6,132,447
Accrued benefit payments 34,170 34,170 (34,170) (126,770)
Reversal of 1994 accrual
for benefit payments 0 (126,770) 0 0
------- ---------- ---------- ----------
Per Form 5500 $34,170 $1,236,578 $6,880,770 $6,005,677
======= ========== ========== ==========
</TABLE>
<PAGE> 10
SCHEDULE I
Page 1 of 2
RHODES, INC. EMPLOYEES' SAVINGS PLAN
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PAR VALUE/
NUMBER
OF SHARES/ COST CURRENT
CONTRACTS VALUE VALUE
---------- ------- --------
<S> <C> <C> <C>
CORPORATE STOCKS--COMMON:
Abbott Laboratories 500 $ 13,210 $ 20,812
Aluminum Company of America 200 6,886 10,575
Ambac, Inc. 500 19,960 23,438
American Express Company 400 8,791 16,550
American Home Products Corporation 400 27,355 38,800
American International Group, Inc. 500 27,599 46,250
Amoco Corporation 400 21,021 28,600
AT&T Corporation 800 35,737 51,800
Avnet, Inc. 200 6,768 8,950
Avon Products, Inc. 200 11,293 15,075
Bandag, Inc. 200 10,333 10,600
BellSouth Corporation 1,400 33,841 60,900
Boeing Company 100 4,359 7,838
Bristol-Myers Squibb Company 800 41,577 68,700
Cabletron Systems, Inc. 100 5,283 8,100
Caterpillar, Inc. 300 18,287 17,625
Coca-Cola Company, The 600 25,308 44,550
Columbia/HCA Healthcare Corporation 500 25,415 25,375
Computer Associates International 300 17,812 17,063
CPC International, Inc. 900 27,596 61,763
Equifax, Inc. 2,000 34,043 42,750
Exxon Corporation 600 28,268 48,300
Federal National Mortgage Association 400 30,759 49,550
FMC Corporation 400 28,250 27,050
Ford Motor Company-Delaware 2,500 70,378 72,188
General Electric Company 600 13,616 43,200
Giddings & Lewis, Inc.-Wisconsin 1,200 22,875 19,800
Halliburton Company 1,500 48,281 75,935
Harsco Corporation 300 12,360 17,438
Hewlett-Packard Company 250 8,401 20,938
Honeywell, Inc. 1,500 51,443 72,938
International Business Machines Corp. 450 37,199 41,117
International Paper Company 200 6,726 7,575
</TABLE>
<PAGE> 11
SCHEDULE I
Page 2 of 2
<TABLE>
<CAPTION>
PAR VALUE/
NUMBER
OF SHARES/ COST CURRENT
CONTRACTS VALUE VALUE
---------- ------- --------
<S> <C> <C> <C>
The Limited, Inc. 700 $ 15,771 $ 11,988
MCI Communications Corporation 600 14,279 15,675
Merck & Company, Inc. 700 23,925 45,938
Microsoft Corporation 150 5,831 13,162
Minnesota Mining & Manufacturing Co. 600 26,708 39,825
Morgan & Company, J. P. 600 27,393 48,150
Morgan Stanley Group, Inc. 200 12,906 16,125
Motorola, Inc. 700 18,971 39,900
Nike, Inc.--Class B 400 9,393 27,850
Norfolk Southern Corporation 900 46,127 71,438
Pacific Gas & Electric Company 1,000 28,909 28,375
Pepsico, Inc. 450 13,830 25,144
Praxair, Inc. 1,900 38,313 63,888
Procter & Gamble Company 700 34,263 58,100
Providian Corporation 1,200 42,074 48,900
* Rhodes, Inc. 35,029 431,724 341,533
Sbarro, Inc. 1,800 40,322 38,700
Schlumberger Ltd. 800 50,517 55,400
Sigma Aldrich Corporation 500 18,113 24,750
The Southern Company 1,500 28,660 36,937
Tecumseh Products Company 700 34,500 36,225
Toys "R" Us 1,500 45,978 32,625
TYCO International Ltd. 800 24,907 28,500
Xerox Corporation 300 30,788 41,100
---------- ----------
Total corporate stocks--common 1,845,232 2,312,371
---------- ----------
COMMON/COLLECTIVE TRUSTS:
* Wachovia Bank Certificate of Deposit Fund 28,851 2,885,100 2,885,100
* Wachovia Bank GIC Fund 7,791 1,365,160 1,365,162
* Wachovia Bank Short-Term Investment
Fund 278,877 278,877 278,877
---------- ----------
Total common/collective trusts 4,529,137 4,529,139
---------- ----------
Total investments $6,374,369 $6,841,510
========== ==========
</TABLE>
*Indicates a party in interest.
The accompanying notes are an integral part of this schedule.
<PAGE> 12
SCHEDULE II
RHODES, INC. EMPLOYEES' SAVINGS PLAN
ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS (A)
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER NUMBER NET
OF PURCHASE PURCHASE OF SALES SELLING GAIN
TRANSACTIONS PRICE TRANSACTIONS PRICE COST (LOSS)
------------ --------- ------------ ------- ---- ------
<S> <C> <C> <C> <C> <C> <C>
* WACHOVIA CERTIFICATE OF 3 $ 683,400 3 $ 540,000 $ 540,000 $0
DEPOSIT FUND
* WACHOVIA SHORT-TERM 214 1,800,595 39 1,736,635 1,736,635 0
INVESTMENT FUND
</TABLE>
*Indicates a party-in-interest transaction.
(a) Represents a transaction or a series of transactions
in securities of the same issue in excess of 5% of
the current value of plan assets as of the beginning
of the year.
The accompanying notes are an integral part of this schedule.
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities
Exchange Act of 1934, the Registration has duly caused this Amendment to be
signed on its behalf by the undersigned, thereunto duly authorized.
RHODES, INC.
By: /s/ Joel H. Dugan
--------------------------
Joel H. Dugan
Senior Vice President
Finance and Administration
Dated: June 28, 1996
<PAGE> 1
EXHIBIT 23(A)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K/A, into the Company's
previously filed Registration Statement File No. 33-53969.
Arthur Andersen LLP
Atlanta, Georgia
June 26, 1996
